“Know and Show” risks related to land rights and land conflicts in their supply chains

Advocate for governments and others in the food industry to tackle land grabbing and to support responsible agriculture investment

Coca-Cola has promised to meet each of these asks. It has set a new standard for land policies in the industry. Once implemented, no other company in the food and beverage sector will have policies as robust on land. It is a bold step, paving the way for other companies to raise the bar.

It is important recognize that policy changes don't automatically solve long-standing problems that already existed in the supply chain. But as one of the world’s biggest buyers of sugar, Coca-Cola has a huge amount of power and influence within the industry. By adopting new policies, and engaging with their suppliers where problems have been identified, Coke can help lead transformation in the sector.

But the reality is the large scale models of investment are inherently risky, and often unnecessarily transfer land rights away from small scale food producers. Hopefully, by fully assessing the social and human rights impacts on communities in their supply chain in their top sourcing countries, Coke will better understand these risks. Where possible, Coke should commit to suppliers who are inclusive of small holder farmers - and do not simply turn local populations into agricultural laborers on massive plantations.

So what did Coca-Cola agree to?

Commit

Coca-Cola committed its vast global operations to “zero tolerance” for land grabs. No other food and beverage company (indeed, no other company in any sector) has publicly declared “zero tolerance” for land grabbing. In fact, outside of the arena of human trafficking, there are few if any commitments by major companies to “zero tolerance” of anything – precisely because the zero tolerance standard is so high. This is a bold and unprecedented step.

As one key feature of its “zero tolerance” approach, Coca-Cola will adhere to the principle of Free, Prior and Informed Consent (FPIC) for all communities across its entire operations - requiring suppliers and independent bottlers to do the same. The FPIC standard applied by Coke will be consistent with the International Financial Corporation’s respected performance standards Five and Seven, and will explicitly apply to all communities (not just indigenous communities). Coca-Cola will incorporate FPIC requirements in its supplier code of conduct, and will conduct audits to ensure that this practice is adhered to. This means that if a supplier fails to uphold the principle, Coca-Cola will terminate the relationship.

Why is this significant?

While there are companies in the oil, gas and mining industry that have committed to implementing FPIC, Coca-Cola and Nestle are the only companies in the food and beverage sector who have publicly made this promise.

Know and Show

Lifting a longstanding code of silence, Coke has publicly disclosed the top three countries where its sugar cane is sourced (Brazil, Mexico and India) and its top three suppliers (COPERSUCAR, Mitr Phol and Dangote). It has committed to disclosing the remainder of its suppliers over the next 3 years creating a new level of accountability for the company. It has also, for the first time, disclosed its global market share of palm and soy purchasing (which, for Coke, is relatively insignificant).

Coke has agreed to conduct and publish third party social, environmental and human rights impact assessments – specifically including impacts related to land and land conflicts - in six top sugar sourcing countries at high risk for land tenure and other human rights violations - beginning with Colombia and Guatemala and expanding to Brazil, India, the Philippines, Thailand and South Africa.

Why is this significant?

As long as companies remain secret about where and from whom they source their ingredients, it is impossible to hold them accountable for their full impacts on communities. By cracking open the door on transparency, Coca-Cola is paving the way for others to follow and lifting the veil that has protected the industry from scrutiny for far too long.

Because companies like Coke don’t actually own land, too often they are not fully aware of the risks they face. Impact assessments – conducted with full community participation - are an essential part of their own due diligence in understanding the risks for the type of conflicts highlighted in Oxfam’s report on the sugar rush. By undertaking and publishing these impact studies, Coke has the ability to deepen its proactive and responsive capacity to land rights violations – including by developing close ties to local stakeholders in order to be alerted to high risk situations.

Advocate

Coca-Cola has publicly acknowledged its “responsibility to take action and use influence to help protect the land rights of local communities.” It will publicly advocate that food and beverage companies, traders (especially of soy, sugar and palm) as well as sourcing country governments endorse and implement the UN Voluntary Guidelines on Land Tenure and responsible agriculture investment (VGGTs). It will also work with industry platforms like the Consumer Goods Forum and SAI Platform to encourage the development of an industry-wide commitment on sustainable sugarcane.

Why is this significant?

While no one company - even a company as big as Coca-Cola - can stop land grabs, major food and beverage companies like Coke, Pepsi and ABF have a tremendous amount of influence with traders and suppliers, with governments in the countries in which they do business, and with consumers. They can bring others along towards respecting the land rights of communities by working with others and imposing strong standards that reverberate for the men and women that grow our food.

What does this mean for communities?

Coca-Cola has also promised to engage with their suppliers and growers to pursue fair resolution to any disputes in their supply chains, where these have been identified. In Brazil and Cambodia, where Oxfam highlighted three cases, Coke has committed to engage with Tate & Lyle Sugar, Usina Trapiche and Bunge and to “take action and use our influence on the final outcome of these disputes.” This is the kind of engagement we are looking for to ensure communities in the specific land conflicts in Cambodia and Brazil are treated fairly.

Oxfam is not asking Coca-Cola to break contracts with the implicated suppliers but instead to use their immense power to be part of resolving land disputes across their supply chains. Oxfam will continue to support the work of allies and partners who are supporting the particular communities affected in the cases profiled and look forward to Coca-Cola stepping up to be part of a process for just resolution.